LONDON MARKET CLOSE: Stocks Rise As Pfizer Says Vaccine 95% Effective

(Alliance News) - Stocks in London ended higher on Wednesday as investors reacted positively to the latest vaccine developments in the ongoing fight against the coronavirus.

US pharma company Pfizer and its German partner BioNTech said Wednesday a completed analysis of their experimental Covid-19 vaccine found it protected 95% of people against the disease and announced they were applying for US emergency approval "within days."

Adding to the encouraging data was that the efficacy was found to be consistent across all age-groups - a primary concern for a disease that hits the elderly the hardest - as well as certain ethnicities.

If the US Food & Drug Administration issues an emergency use authorisation, the vaccine could start reaching the first Americans - frontline workers, the elderly and other high-risk people - in the first half of December.

Pfizer was up 1.7% in New York.

In London, the FTSE 100 index ended up 19.91 points, or 0.3%, at 6,385.24. The FTSE 250 closed up 183.70 points, or 0.9%, at 19,699.87. The AIM All-Share closed up 6.79 points, or 0.7%, at 1,019.07.

The Cboe UK 100 index ended up 0.4% at 636.22. The Cboe 250 ended up 1.1% at 17,080.63. The Cboe Small Companies finished up 1.5% at 11,258.54.

In Paris the CAC 40 and the DAX 30 in Frankfurt ended up 0.5%.

"Stocks are higher as the vaccine race is heating up now that Pfizer and BioNTech confirmed their potential Covid-19 vaccine is 95% effective. Early last week, the companies announced that it was more than 90% effective so good progress has been made in the short time period. On Monday, Moderna Inc said their hopeful coronavirus vaccine is 94.5% effective so things are neck and neck in the drug race. The optimistic news surrounding a possible vaccine has been doing the rounds for a while now and to a certain extent, it is losing its impact on the markets," said CMC Markets analyst David Madden.

On the London Stock Exchange, RSA Insurance ended the best blue-chip performer, up 4.6% after the insurer said it has reached an agreement to be sold in a deal with a two-headed consortium which values the London-listed firm at GBP7.2 billion.

The deal, first announced earlier this month, will see the insurer divided between Canada's Intact Financial Corp and Scandinavian insurer Tryg AS. Under the deal, RSA shareholders will receive 685 pence in cash for each share, the same amount proposed earlier in November. In addition, RSA shareholders will be entitled to receive the insurer's interim dividend of 8p.

The acquisition price represents a premium of 51% to November 4's closing price in London, being the day before the announcement of Intact and Tryg's possible offer. The deal will see Intact run RSA's Canadian, UK and international operations, while Tryg will take RSA's Swedish and Norwegian businesses. The two will co-own RSA's Danish business.

SSE ended up 4.4% after the energy firm said its profit was sharply higher in the first half of its financial year after substantial exceptional gains, in large part relating to its asset disposal programme.

Perth, Scotland-based SSE posted a GBP829.5 million profit for the six months ended September 30, multiplying from GBP128.9 million a year before.

The big change, SSE said, reflects: "Pretax exceptional gains of GBP654.4 million recognised during the year mainly driven by a combination of progressing with the group's GBP2 billion plus non-core asset disposal programme and IFRS 9 remeasurements on operating derivatives."

Adjusted pretax profit, which excludes exceptional items, fair value movements on financing derivates, and other factors, fell 26% to GBP193.9 million from GBP263.4 million. Revenue declined 7.5% to GBP2.82 billion from GBP3.05 billion.

At the other end of the large caps, Spirax-Sarco ended down 3.8% after the steam management systems said it saw some slowing of the decline in sales in the second half of the year so far, but remains wary of the possible damage that Covid-19 resurgences could have on recovery.

Spirax-Sarco said it saw some improvement in the third quarter of the year ended September 30, without providing specific figures. Overall organic sales decline in the four months to the end October eased compared to the first half of the year.

Group operating profit margin was higher than in the first half of the year, supported by increased sales and continued cost containment actions, Spirax-Sarco said. In the 10 months to end October, operating profit was slightly lower than the year prior.

The pound was quoted at USD1.3300 at the London equities close, up from USD1.3254 at the close Tuesday, with investors hopeful that the UK and the EU can strike a post-Brexit trade agreement ahead of a December 31 deadline.

If a deal is not agreed before the deadline, the UK will leave the EU's main trading arrangements - the single market and customs union - and trade with the bloc on terms similar to countries such as the US or China.

However, UK Business Secretary Alok Sharma said, in an interview with Sky News: "I hope that we will end up with a free trade agreement.

"We have made progress but there is still some way to go and we need to make sure that the EU understands that the UK is a sovereign nation and that's the basis on which our arrangement with the EU is in the future," he added.

The EU and the UK have so far failed to reach a compromise on a number of issues in Brexit trade talks, with fisheries being one of the main stumbling blocks.

"The pound is continuing to strengthen versus the dollar and the euro during Wednesday trading. Sterling's gains, at a time of make-or-break for the negotiations between the EU and the UK over a future trade deal, mean investors are relatively confident in a positive outcome because, despite lingering difficulties in reaching a consensus over matters such as fishing, neither side appears willing to walk away from the negotiating table without a trade deal," said analysts at ActivTrades.

In addition, the pound found support following October's UK consumer price index report, with investors encouraged by a stronger-than-expected headline inflation rate.

The annual rate of UK consumer price inflation accelerated by more than expected in October, figures from the Office for National Statistics showed.

Inflation edged up to 0.7% in October from a rate of 0.5% in September. This was higher than market forecasts, according to FXStreet, of 0.6% annual inflation.

On a month-on-month basis, prices were flat in October after growth of 0.4% in September. This was still, though, better than expectations of a 0.1% fall.

The euro stood at USD1.1870 at the European equities close, firm from USD1.1866 late Tuesday, following inflation data from the continent.

The eurozone's annual price deflation was stable in October, data showed, though consumer prices ticked up monthly.

According to Eurostat, consumer prices slipped 0.3% yearly in the euro area in October, in line with both September's decline and market forecasts. In October of last year, prices rose by 0.7%.

In August, consumer prices fell 0.2% on a year before, meaning October was the third month on the bounce of deflation in the eurozone. On a monthly basis, consumer prices were 0.2% higher in October.

Against the yen, the dollar was trading at JPY103.71, down from JPY104.22 late Tuesday.

Stocks in New York were mostly higher at the London equities close amid hopes a vaccine can help the global economy to return to pre-Covid levels.

The DJIA was up 0.3%, the S&P 500 index up 0.2% and the Nasdaq Composite was flat.

On Wall Street, Boeing was up 1.2% after the aerospace giant noted that the US Federal Aviation Administration has cleared its grounded 737 MAX to return to the skies.

The US regulator in its statement said the approval followed "an unprecedented level of collaborative and independent reviews by aviation authorities around the world".

eToro analyst Adam Vettese said: "More than anything, it finally means that Boeing can begin its journey to recovery, particularly if a potential coronavirus vaccine means travel restrictions will loosen again soon. Without FAA approval, Boeing and the wider airline industry would have faced an uphill struggle to get back to pre-Covid levels of capacity."

Brent oil was quoted at USD44.44 a barrel at the London close, up sharply from USD43.40 at the close Tuesday, amid vaccine hopes.

Gold was priced at USD1,879.79 an ounce at the London equities close, lower against USD1,887.43 late Tuesday.

"The markets have been relatively quiet so far this week, with investor sentiment remaining largely positive thanks to the cheerful news we have heard from the vaccine front. Dips in stocks, crude oil, commodity dollars and emerging market currencies continue to be bought, while safe-haven gold continues to struggle," said ThinkMarkets analyst Fawad Razaqzada.

The economic events calendar on Thursday has the latest US jobless claims figures at 1330 GMT.

The UK corporate on Thursday has interim results from speciality chemicals firm Johnson Matthey, postal operator Royal Mail and Anglo-South African bank Investec. There are also trading statements from DIY retailer Kingfisher and from merchant bank Close Brothers.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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